17PT Barclays 24

RNS Number:1768P
Xerox Corp
21 December 2001



              XEROX AND FLEXTRONICS CLOSE ON MANUFACTURING ASSET SALES 

                  Xerox Plants in Mexico, Canada, and Malaysia 
                  Transfer to Flextronics in $118 Million Sale

 
STAMFORD, Conn., and SINGAPORE, Dec. 21, 2001 - Xerox Corporation (NYSE: XRX)
and Flextronics (NASDAQ: FLEX) today announced the completion of the first in
a series of asset sales to transfer Xerox's office product manufacturing
operations to Flextronics.

 
The companies completed the sale of Xerox's plants in Toronto; 
Aguascalientes, Mexico; and Penang, Malaysia to Flextronics for $118 million
plus the assumption of certain liabilities. The approximately 2,545 current
Xerox employees in these operations transfer to Flextronics. 


In September, Xerox and Flextronics announced a manufacturing agreement that
includes payment to Xerox of about $220 million for the sale of inventory,
property and equipment as well as a five-year contract for Flextronics to
manufacture certain Xerox office equipment and components. In addition to the
sale of Xerox's operations in Toronto, Aguascalientes and Penang, the company
is selling to Flextronics its office manufacturing operations in Resende,
Brazil and Venray, The Netherlands. 


The asset sales announced today mark the beginning of a one-year transition
period for Flextronics to assume manufacturing of Xerox-designed office
products and related components. Flextronics will also begin the
manufacturing of some Xerox electronic parts and subsystems during the first
half of 2002. Xerox will continue to strengthen its manufacturing
competencies in high-end production printing and publishing equipment, toner
and imaging supplies through its remaining global manufacturing plants. 


Xerox had previously received portions of the $118 million from this first
set of asset sales and expects to receive today the remaining payment.
Additional cash proceeds from the agreement will be received in phases as the
companies finalize the other sales, subject to the completion of certain
regulatory and other requirements. 


For additional information about The Document Company Xerox, please visit our
Worldwide Web site at www.xerox.com/investor. 


This release contains forward-looking statements and information relating to
Xerox that are based on our beliefs as well as assumptions made by and
information currently available to us. The words "anticipate," "believe,"
"estimate," "expect," "intend," "will" and similar expressions, as they
relate to us, are intended to identify forward-looking statements. Actual
results could differ materially from those projected in such forward-looking
statements. Information concerning certain factors that could cause actual
results to differ materially is included in the company's Form 10-Q for the
quarter ended September 30, 2001. 


XEROX(R), The Document Company(R) and the digital X(R) are trademarks of
XEROX CORPORATION. 

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